Losing a spouse is a very difficult thing to deal with. Not only is there grief, but also stress in dealing with the finances. My goal with today’s blog post is to provide a financial planning checklist for widows that helps them navigate this difficult time and terrain.
FINANCIAL PLANNING CHECKLIST FOR WIDOWS
1. Decide who will handle your investment and financial planning needs
For many widows, their husbands handled the finances. If that was true in your relationship, then you’ll need to give some thought as to who will serve this role.
Will it be you or will you hire the services of a professional?
2. Seek the help of professionals if you’re newly widowed
Even if you handle your own investment and financial planning matters, there are some areas where it will be necessary to seek help, especially if you are a recent widow. Rather that give you a lengthy list here, you can check out a blog post I previously wrote titled, Your 1st Year as a Widow: Top 10 Things to Do Right Away.
3. Ensure the right amount of life insurance is in place
If you’ve lost a loved one and they didn’t leave behind much life insurance, then you know how difficult this can be.
To protect your loved ones, make sure that your financial plan includes a life insurance review.
4. Start thinking about how you’ll handle your finances if you get remarried.
We’ve seen remarried couples keep their finances completely separate from each other. Often times the motivation for this is that they want their children to benefit from their assets instead of their new spouse.
On the other hand, we’ve seen remarried couples combine everything. They want to forget the past, focus on a life with their new partner, and share in everything together.
There are no right or wrong answers here. Everybody’s situation is different. Factors such as kids, trust, past experience, need, etc… will dictate your decision.
5. Review your Social Security options
This one is very important. If you are caring for children who are under the age of 16, then you are entitled to Social Security benefits if you lose your spouse. If you have a child under the age of 18, then they are entitled to a benefit. If your children are now out of the house, then you will be entitled to Social Security benefits, based on your husband’s earnings record, once you reach the age of 60.
But be very careful taking the benefit at that age as it will be reduced for life. This is a complicated area and you need to understand your options before making an irrevocable decision you’ll regret later. The decision, if not made properly, could result in much less money for you over the course of your life. There may also be various strategies that you can implement that can maximize your Social Security income.
6. Verify that your estate planning is in order
If you haven’t updated beneficiaries, Wills, Trusts, account titles, etc… since your husband died, then be sure to tackle that right away.
If not done, then your assets could go to people you didn’t intend. And it could cause tremendous stress and cost for the beneficiaries.
7. Use a password manager for all of your online financial accounts
One of the most stressful things about losing a spouse is the overwhelming feeling of being disorganized. In many cases, widows don’t even know the log in credentials for their various financial accounts, which makes it extremely difficult to pay bills or transact business.
A password manager will help to overcome this problem as it will store all of your log in info in one place. Additionally, it will help you to create complex passwords for security reasons.
You can read more about this in my article, Are Password Managers Worth It?
8. Review your Retirement Plan
The amount of life insurance you received at your husband’s death and the amount of his salary that is no longer present, could drastically impact your ability to retire. Or even your ability to sustain your retirement.
If you haven’t done so, it will be important for you to have an idea of your standard of living. In other words, what is your goal? Are you in retirement, close to it, or further away? What changes need to be made today to reach your goals? Do you need to save more? What about go back to work? Should you downsize your home? Modify your goals?
These are the types of questions you need to be analyzing to make sure you’ll have enough money to retire and a high probability of it not running out. And focusing on your retirement plan today will allow you to make adjustments now rather than in the future when it may be too late.
As you can see, there are many items to focus on that specifically apply to widows. I hope that you’ve found this checklist useful as you get your financial planning in order.
What other financial planning items do you feel are important for widows to focus on? If you have any thoughts, comments, or questions please share them below.
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Brad E.S. Tinnon
CERTIFIED FINANCIAL PLANNER™